Tag Archives: b2b media

The Institute for Supply Management’s PMI index reading for May 2011 of 53.5 surprised most analysts, even the pessimistic ones. The general consensus was for a slight downward move from April’s reading of 60.4 to 58. Even the worst of the pessimists only had it bottoming out around 55.

So using history, what does the 53.5 likely mean for June and beyond?

The 53.5 reading in May 2011 is the lowest reading of PMI since September 2009

The PMI dropped 12.9% from April (60.4) to May (53.5); the 12.9% drop is the biggest percentage drop in PMI in more than 7 years.

The September-October drop in 2008 is the next highest in the past 7 years at 12.3%. I simply stopped looking after 7 years so it might be even farther back (PMI tables are easy to find online if you want to do the exercise yourself).

The PMI has dropped 14.4% for the March to May 3-month timeframe. A drop in general is not unusual per se as in the past 6 years (excluding 2011) there has been a tendency of the PMI to decline from March to April in 4 of the past 6 years (a bit of pre-summer correcting perhaps?) but the average decline (excluding 2011) for those 4 years is an average of 3.5% in PMI vs. the 14.4% we’ve seen this year. Thus, 2011 is a 4x steeper decline than we’ve historically seen for this time period. This is a huge drop and beyond typical correction.

In the years with declining March to May PMI (those 4 of last 6); 2 of the 4 shrunk again further thru June at an average further decline of 3%; whereas the other two increased only slightly vs. May @ 0.4% and 2.6%, but still stayed below March levels. In short, based on historical performance – it wouldn’t be unreasonable to expect June’s PMI (released July 1) to potentially drop again or only modestly tick up…this certainly explains manufacturing supplier hesitancy or uncertainty.

If the index drops below 50; expect the dreaded R word to be in rampant use in media…50 or above means growth, below 50 means contraction.

The following article from Industrial Distribution is an interview with the Bradley Holcumb (I list him by his initials – BH) – he is the chair of the ISM (organization behind the PMI) and he speaks to the data in the May report and what it means to those in the manufacturing industry, and whether the decreasing growth should raise concern among manufacturers.

To me, his comments suggest that most of the market place for manufacturers are exercising a less than optimistic wait and see attitude.

Key excerpts:

ID: It looks like the growth was a little bit slower this month. Is this an indication of an overall lessening of the recovery, or should we be expecting a ‘peaks and valleys’ type situation?

BH: 53.5 as a PMI is clearly off 6.9 points, but it’s still in the growth category, it’s just growing slower. The things that are primarily impacting the PMI are the softening of growth in new orders and production, which are both off around 10 points. But we have to keep in mind that in January, Feb, March, April, all of these important primary metrics were in the 60s, which is really strong. Companies are taking their foot off the accelerator a bit for the month of May. There’s a little bit of a cautionary note, and a little bit of a wait and see.

ID: Are there any other major takeaways for manufacturers and distributors?

BH: I guess our overall sentiment here is continuing growth and cautious optimism, going forward over the next few months. We’re seeing some declines in these metrics for the first time this year, but it’s only one data point. Let’s not get ahead of ourselves; let’s wait until next month before we read too much into this.

A brief story illustrating the dangers of relying on the “last click” to measure the effectiveness of online marketing expenditures using a simple “offline” analogy to bring the point home.

To understand how the credit for the sale is “unfairly” being attributed to Google; consider this “offline” analogy:

Let’s say it’s the morning of Super Bowl Sunday and you decide you want to throw a couple burgers on the grill for the game – so in your head you already plan on hitting the grocery store for burgers. This is what we would call “pre-existing interest”…but first you’re scanning the paper – catching up on all the pre-game hype…while doing so; you notice an ad for a store you don’t typically frequent. This ‘gourmet’ store is advertising a sale on buffalo burgers for $5.99 a pound – bingo!

You had just read an article a few days before in your favorite health magazine courtesy of a friend’s facebook post about the benefits of buffalo meat and just like that – you shifted from buffalo curiosity a few days earlier to buffalo interest because that ad triggered your memory of something that had previously caught your attention – so off you head to the gourmet supermarket to buy your burgers.

You park your car and on your way into the store you happen to notice a big sign in the window advertising Buffalo Burgers for $5.99 a pound – good to confirm you’re in the right place…a contextually placed relevant ad as you enter the store..so you walk back to the meat department wondering where the buffalo burgers might be…and lo and behold there’s a bright neon-colored sign advertising the $5.99 buffalo burgers with an arrow to a special section of the meat cooler.

This bright neon-colored sign is the last ad you see before selecting the burgers and heading to the checkout.

Under the last-ad-seen model, the article you read earlier touting the benefits of buffalo burgers over traditional beef burgers, the newspaper ad you read in the morning advertising the buffalo burger sale and the sign hanging in the window viewable from the park lot were all worth nothing and did not contribute in any fashion to your ultimate purchase. Instead, the reason you bought the buffalo burger was because of the neon sign pointing to the meat in the meat section.

Ludicrous if not idiotic right?

But using this analogy; you can see the danger of relying on counting only the last ad seen as not all advertising is intended to be immediate direct response and transaction driven.

Now tell this story, or a similar one, using online vehicles as the same can be said for online advertising in the b2b space…guess what the “last ad seen” tends to always be…a search engine link driven from Google…leading unfortunately to them unfairly getting too much credit for the sale happening vs. contributing to a later stage of the buying process…

Most email service providers will report messages that have been passed on to the Internet, and not “bounced”, as ‘delivered’; and subsequently reporting those metrics back to you in the form of a delivery rate. These delivery rates are often pretty high, and if your subsequent click thru rate is low…it must be the copy – not the quality of the list…right?

Think about it, when was the last time you saw any email service provider report saying delivery rates were less than somewhere in the range of 95-99%? What this figure typically means is out of every 100 emails sent on your behalf, only 1 to 5 of those come back as a bad email address or undeliverable (also known as a bounce). Once an email is sent, and it doesn’t register as a bounce, that has to mean it has been successfully delivered to a recipient’s inbox, right?

Wrong.

According to the Email Deliverability Benchmark Report released by “Return Path” back in July, deliverability failures continue to plague marketers but not necessarily revealed in deliverability reports. According to Return Path, what these reports don’t take into consideration is that some ISPs may go on to block the message or that the recipient may have spam filters in place. These exceptions leaves marketers with the impression that they are getting delivery rates of over 90% whereas around 80% was more likely. The reports goes on to say that for the first half of 2009 (January thru June); the average inbox placement rate for permission, commercial email in the US and Canada was 79.3%. Of the nearly 21% of email that is not delivered to the inbox, only 3.3% is sent to a “Junk” or “Bulk” email folder, while nearly 18% is simply not delivered at all – but not indicated as a bounce. Business email addresses protected by systems like Postini, Symantec or MessageLabs are even tougher where on average, only 72.4% of commercial email is delivered to the inbox through these enterprise systems. These systems are more likely to deliver messages to a junk folder as compared to consumer ISPs that are more likely to block email altogether. In the United States, of the top ISPs, the toughest inboxes to reach are those at MSN, Hotmail and Gmail. Marketers fare slightly better at Cox, USA.net and Time Warner Cable/Road Runner.

So what’s a smart marketer to do?

1. Don’t believe the bounce myth, that whatever gets sent and doesn’t bounce must have been received. The metric that simply uses emails sent vs. emails bounced is a bounce rate…instead ask for a deliverability rate. If they don’t know the difference…shop elsewhere. You should also inquire about the availability of other metrics like open rates or click-thru rates…if the so-called “deliverability rate” is high, but open rate low (say <10%)…you should question the accuracy of the “deliverability rate”.

2. Verify the accuracy and activity of the subscription base: Focus on those e-newsletters or list-builds that are acquired through proven online publishers who themselves have a vested interest in aggregating accurate and responsive online addresses and audience for their own business purposes and promotion vs. perhaps a 3rd party provider who is aggregating addresses from a mix of sources. Messages that your target audience doesn’t have access to will not generate a response.

3. Proven circulations are the way-to-go: E-newsletter publishers, especially those publications with a lengthy, proven track record, are likely to have a proven success rate and active readership. As a result, not only is the message more likely to be seen – the publishers should be able to give you a reasonable expectation range for subsequent activity for your campaign.

4. Take some responsibility for the issue: According to Direct Path most of the major drivers of poor deliverability rates are the direct result of marketing practices, not technical ones. These include complaints, which spike when email is unexpected or undervalued by the recipient and spam traps, which are most often found on old lists or have been built with poorly sourced data.

The number of people who click banner (‘display’) ads has dropped 50% in less than two years, and only 8% of internet users account for 85% of all clicks, according to the most recent “Natural Born Clickers” study from ComScore and media agency Starcom.

The study indicates that only 16% of U.S. internet users ever click on banner ads down from 32% who clicked on display advertising in July 2007.

If we put it in perspective; clicks are a direct-response measurement. For display campaigns, we need to look at brand-awareness studies, purchase-intent lifts and engagement rates. Comscore client surveys quoted in the study have shown display ads produce measurable lift in brand site visitation, trademark search, and both on- and offline sales, regardless of whether users clicked on the display ads themselves.

If you believe in “buy cycle marketing” (see my other posts on the topic); you understand (and accept) that users might work with an ad, but not click on it. That doesn’t mean the banner didn’t impact results elsewhere in your marketing mix.

Just a quick short list of five mistakes you could make if you aren’t careful with how you are managing your b2b twitter account.

I’m sure there are more – but these are the 5 big ones in my book

1. Making the mistake thinking that twitter is about talking vs. listening…Twitter is not the Internet version of the Town Crier where you simply ring your bell, yell something and then go back inside only to come out when it’s time to yell something again. Yelling something is fine; provided you are doing so to get followers to respond so that you can listen, reply and interact with them.

2. Over-editing or tightly-controlling your posts…Twitter is not about crafting one perfect post after another; what you “twit” doesn’t have a long shelf-life to begin with. Your message and personality gets developed over several posts throughout the day/week/month – people will forgive a less than perfect post…provided what you are saying initiates good discussions or passes along strong value or you follow it up quickly with something better.

3. Picking the wrong-person to run your twitter account or having someone tweet on behalf of someone else …o.k. so that’s really two separate mistakes but bear with me…First, your twitter posts are speaking on behalf of your company and your brand; make sure who ever is running your b2b twitter account is capable of making good judgments for the company so that everything that gets posted doesn’t need to run through an approval process and everything that is posted has some value. Secondly, if the person you want to run twitter is incapable of running twitter – you are picking the wrong person to be the face of any of your social media. If your CEO is too busy…don’t bother trying to impersonate your CEO – that could be embarrassing when it’s discovered – instead, pick someone else. Lastly; make sure who you pick is high enough in stature or presence that they can draw a following. In other word’s just because your marketing intern is “really good on computers” and “really gets” social media doesn’t mean he / she has the credibility / reputation to draw a following or to develop quality content.

4. Not updating regularly: People don’t expect hourly posts and they don’t necessarily expect daily posts – but they do expect meaningful / consistent activity. If you can’t regularly post content of solid value or discussion – you probably shouldn’t be bothering with social media to begin with.

5. Every post includes a link…occasionally or even frequently passing along other folks content via a link is fine – just don’t make it an occurrence in every post…especially if you happen to have folks who follow you with a mobile device; depending on reception; it’s easy to ignore these posts and eventually they could just end up ignoring you altogether.

An August 2009 CMO Survey, conducted by professor Christine Moorman of Duke University’s Fuqua School of Business in conjunction with the American Marketing Association indicates some positive news for the future.

Key highlights:

Overall, 59 percent of marketers are more optimistic about the U.S. economy than they were just one quarter ago. 47 percent are feeling more optimistic about prospects for revenue from end customers and 39 percent more optimistic about revenue from channel partners (who resell products to end customers, e.g. distributors) than they were just three months ago.

Marketers continue to report a shift in spending away from traditional advertising (with a planned overall decrease of 8 percent) and toward Internet marketing, where they expect to increase investments by 10 percent. They report plans to increase spending on social media efforts by more than 300 percent in the next five years, increasing their marketing budget allocations for social media from 3.5 percent to 13.7 percent over the next five years. Social networking (65 percent), video and photosharing (52 percent) and blogging (50 percent) dominated firms’ social media patterns. Survey respondents report the five most frequently reported uses for social media tactics are brand building, customer acquisition, new product introductions, customer retention and market research.

Russia and Eastern Europe are the regions where marketers expect the most future growth to occur, with significant decreases in opportunities in Canada, Mexico and Western Europe.

Driven by economic circumstances, the buying process for large and complex purchases is changing. Marketers who are aware of changing buyer behaviors, such as the use of information resources, will be better able to align their selling process with the buying process to improve effectiveness.

The most dramatic change… is the shift from face-to-face events and tradeshows to virtual events and virtual tradeshows. Attendance at face-to-face events and tradeshows has substantially declined primarily due to cutbacks in travel budgets. Instead, many buyers and influencers in the buying process turned to virtual events and tradeshow in the first half of 2009 for obtaining product, service and vendor information.

Some other highlights:

30% increase in use of virtual events to find information (largest increase of all venues)